Final answer:
A creditor must notify a consumer in writing within 30 days if their loan application is missing necessary information. To reassure a bank about loan repayment, an applicant can offer collateral, find a cosigner, provide a financial plan, present strong financial statements, make a larger down payment, and maintain a good credit score.
Step-by-step explanation:
If a creditor receives a loan application that is missing necessary information, the consumer must be notified in writing of this fact within 30 days. When applying for credit, such as a mortgage which typically has terms over either 15 years or 30 years, there are various ways an applicant can reassure the bank despite imperfect information about their ability to repay the loan. Some methods include:
- Providing additional collateral as security for the loan.
- Supplying a cosigner who has a strong credit history.
- Presenting a solid financial plan that demonstrates the capacity for repayment.
- Sharing financial statements that show a healthy cash flow.
- Offering a higher down payment to decrease the loan-to-value ratio.
- Maintaining a good personal credit score.
In addition, borrowers should be mindful of the terms set by credit companies, such as those that charge a $10 late fee for late payments and $5 a day each day the payment remains unpaid.